Jakarta flight risk for exporters

22/06/2021 - 14:54

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There’s speculation Perth’s only remaining direct flight to Jakarta will be cancelled, potentially hitting local agribusiness exporters.

Jakarta flight risk for exporters
Perth Airport links Western Australia to the world. Photo: Gabriel Oliveira

There’s speculation Perth’s only remaining direct flight to Jakarta will be cancelled, potentially hitting local agribusiness exporters. 

Airline Garuda Indonesia has hit financial trouble in recent weeks, reportedly posting a $US2 billion net loss and delayed debt payments.

Indonesian media has reported the company will cease flights to Perth, Melbourne, and probably Sydney; ending Western Australia’s only direct air route to Indonesia during the COVID period.

Business News was told by a Garuda booking agent today that there were no flights available after July 1 although that would be subject to review in weeks ahead.

Indonesia Institute president Ross Taylor said he understood the route had been cancelled.

That could dent some of the benefit to exporters from the newly-in-force IA-CEPA trade deal between Australia and Indonesia.

“There’s been some small but reasonable progress getting fresh produce into Jakarta,” Mr Taylor said.

“That’s all perishable (merchandise).

“This cuts any physical link our state has with Indonesia.”

He said exporters would probably need to transit their freight via Singapore, adding to complexity and cost.

About 100 passengers per month had been allowed on the route due to COVID-19 restrictions, Business News understands, making it potentially unprofitable.

The state government’s Indonesia Market Outlook for this financial year touted the direct flights as a key advantage in increasing the number of international students from Indonesia.

It also highlighted food exports as an opportunity.

“Demand for food ingredients and innovative technologies for Indonesia’s substantial local food processing sector is also growing,” the report said. 

“The Western Australian government’s commissioned research found there are specific opportunities in Indonesia for Western Australian suppliers of meat, vegetables, fruit, seafood, dairy and gourmet foods (prepacked salads, yoghurt, chocolates, nougat, honey and olives).”

Prior to COVID-19, there were more regular flights to Indonesia, with five airlines running eight trips a day to Bali, Business News understands.

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